Exhibit 10
ARMCO INC.
1995 DIRECTORS STOCK PURCHASE AND DEFERRED
COMPENSATION PLAN
1. Purpose.
The Armco Inc. 1995 Directors Stock Purchase and Deferred Compensation Plan
(the Plan) is established effective May 1, 1995 for the benefit of directors
of Armco Inc. (the Corporation) who are not employees of the Corporation or
any of its subsidiaries. The Corporation has adopted the Plan in recognition
that its long-term success and achievements are enhanced and the interests of
its shareholders are best served when its outside directors have a direct and
personal stake in the performance of the Corporation's stock.
2. Definitions
As used herein, the following terms have the meanings hereinafter set forth
unless the context clearly indicates to the contrary:
(a) "Account" shall mean the deferred Fees account established for a
Participant pursuant to Plan Section 5.3.
(b) "Board of Directors" shall mean the board of directors of the
Corporation.
(c) "Common Stock" shall mean shares of the common stock, par value $.01 per
share, of the Corporation.
(d) "Common Stock Unit" shall mean the bookkeeping entry representing the
equivalent of one share of Common Stock.
(e) "Secretary" shall mean the person holding the position of Secretary of
the Corporation.
(f) "Effective Date" shall mean May 1, 1995.
(g) "Fees" shall mean all retainer, meeting and committee fees payable to a
non-employee director for service on the Board of Directors for any calendar
year from and after the Effective Date, before any reduction pursuant to this
Plan.
(h) "Fee Payment Date" shall mean the first calendar day of the third month
of each fiscal quarter or, if such date is not a business day for the
Corporation, the next succeeding business day.
(i) "Participant" shall mean any member of the Board of Directors who is not
also a regular, salaried employee of the Corporation or any of its
subsidiaries.
(j) "Stock Price" shall mean the simple average of the high and low sales
prices of a share of Common Stock as reported in the report of composite
transactions (or other independent published source designated by the Board of
Directors) on the Fee Payment Date (or if there shall be no trading on such
date then on the first previous date on which sales were made on a national
securities exchange). Notwithstanding the foregoing, if Common Stock is
purchased in the market for purposes of the Plan on a Fee Payment Date, Stock
Price means the actual average cost per share of the aggregate purchases of
Common Stock for the Plan on such date.
3. Participation.
All members of the Board of Directors who are not also regular salaried
employees of the Corporation or any of its subsidiaries shall participate in
the Plan.
4. Payment of Fees.
4.1 Automatic Payment of Fees in Common Stock
Twenty-five percent (25%) of that portion of the Fees paid as an annual
retainer to each Participant on and after the Effective Date shall be applied
to the purchase of Common Stock. A Participant may elect to defer receipt of
such Fees by complying with the requirements of Plan Section 5.1,
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in which case such Fees shall be credited as Common Stock Units at the Stock
Price on the Fee Payment Date. If not deferred pursuant to Plan Section 5.1,
whole shares of Common Stock purchased in respect of such Fees shall be issued
to the Participant as soon as practicable after their purchase. Cash shall be
paid to a Participant in lieu of a fractional share of Common Stock.
4.2 Election to Receive Fees in Common Stock
Fees paid as an annual retainer which are not automatically paid in Common
Stock pursuant to Plan Section 4.1 or which are not deferred pursuant to Plan
Section 5.1 may be applied at a Participant's election to the purchase of
Common Stock at the Stock Price on the Fee Payment Date. A Participant may
make such an election by filing the appropriate election form with the
Secretary at least six (6) months before the beginning of the period of
service to which the election applies. Whole shares of Common Stock purchased
in respect of such Fees shall be issued to the Participant as soon as
practicable thereafter. Cash shall be paid to a Participant in lieu of a
fractional share of Common Stock.
4.3 Revising An Election
A Participant may amend or terminate an election under this Plan Section 4.2
by written notice to the Secretary. Such amendment or termination shall be
effective with respect to Fees payable for service during calendar periods six
(6) months after the date of delivery of such notice to the Secretary.
4.4 Restrictions on Resale of Stock
To the extent necessary to satisfy the requirements of the exemption afforded
by Rule 16b-3 under the Securities Exchange Act of 1934, no Participant shall
be permitted to sell any shares of Common Stock purchased and issued to such
Participant pursuant to this Paragraph 4 prior to the expiration of a period
of six (6) months from the date of issuance of such shares to such
Participant. Prior to the time the resale restriction described herein
lapses, none of the shares of Common Stock purchased in respect of Fees may be
sold, assigned, bequeathed, transferred, pledged, hypothecated or otherwise
disposed of in any way by the Participant. The Board of Directors may, in its
discretion, take such action as it shall deem necessary or appropriate to
insure compliance with this Plan Section 4.4 and any applicable securities
laws.
5. Deferral of Fees.
5.1 Deferral Election
A Participant may elect to defer receipt of his or her Fees, including all or
any portion of his or her Fees which are subject to Plan Section 4.1 hereof,
by filing the appropriate deferral form with the Secretary on or before
December 15th of the calendar year prior to the calendar year in which such
deferral is to be effective; provided that, to the extent such deferral is to
be credited as Common Stock Units, such election must be made by filing the
appropriate deferral form no later than six (6) months before the beginning of
the period of service to which the deferral applies. Notwithstanding the
foregoing, no deferral shall be permitted to the extent prohibited by
applicable law.
5.2 Period of Deferral
Subject to Plan Section 5.8, a Participant may elect to defer receipt of Fees
until (i) a specified date in the future, (ii) cessation of the Participant's
service as a member of the Board of Directors or (iii) the end of the calendar
year in which cessation of the Participant's service as a member of the Board
of Directors occurs.
5.3 Deferred Fees Account
There shall be established an Account in the Participant's name on the books
of the Corporation for each Participant electing to defer Fees pursuant to
this Paragraph 5.
5.4 Investment of Deferrals
Except as provided in the next sentence, deferrals shall be credited to a
Participant's Account in Common Stock Units. With respect to that portion of
his or her deferrals under the Plan which is not subject to Plan Section 4.1,
the Participant may elect under the procedures set forth in Plan Section 4.2
that such deferrals be credited to his or her Account in dollars or Common
Stock Units.
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5.5 Amounts Credited to Accounts
(a) Investment in Common Stock Units. To the extent the deferral of a
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Participant's Fees is deemed to be invested in Common Stock Units, such
amounts shall be credited to his or her Account on the Fee Payment Date to
which the deferral election applies. The amount deferred shall be converted
into a number of Common Stock Units by dividing the amount of Fees payable by
the Stock Price as of such date. The quotient, which shall be expressed in
whole or fractional Common Stock Units to the nearest one/one hundredth
(1/100th), shall be credited to the Participant's Account as of such date.
(b) Cash Dividends. Whenever cash dividends are paid with respect to shares
of
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Common Stock, each Participant's Account shall be credited on the payment date
of such dividend with additional Common Stock Units (including fractional
units to the nearest one/one hundredth (1/100th)) equal in value to the amount
of the cash dividend paid on a single share of Common Stock multiplied by the
number of Common Stock Units (including fractional units) credited to a
Participant's Account as of the date of record for dividend purposes. For
purposes of crediting dividends, the value of a Common Stock Unit shall be the
Stock Price as of the payment date of the dividend.
(c) Recapitalizations, Splits and Mergers. The number of Common Stock Units
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credited to each Participant's Account shall be appropriately adjusted and
modified upon the occurrence of any stock split, stock dividend or stock
consolidation affecting the Common Stock. In the event of a merger,
consolidation or an acquisition involving more than 50% of the issued and
outstanding shares of Common Stock, the Board of Directors shall have the
authority to amend the Plan to provide for the conversion of Common Stock
Units credited to Participants' Accounts into units equal to shares of stock
of the resulting or acquiring company (or a related company), as appropriate,
if such stock is publicly traded or, if not, into cash of equal value on the
date of merger, consolidation or acquisition. If pursuant to the preceding
sentence cash is credited to Participants' Accounts, income shall be credited
thereon from the date such cash is received to the date of distribution at the
rate determined pursuant to Plan Section 5.5(d). If units representing
publicly traded stock of the resulting or acquired company (or a related
company) are credited to Participants' Accounts, dividends shall be credited
thereto in the same manner as dividends are credited on Common Stock Units
credited to such Accounts.
(d) Deferrals in Cash. To the extent not deemed invested in Common Stock
Units
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pursuant to Plan Section 5.5(a), the Account of a Participant will be credited
with the dollar amount of the Participant's deferrals as of the Fee Payment
Date. Interest shall be credited thereon from the date such cash is received
to the date of distribution quarterly, at the end of each calendar quarter, at
a rate per annum (computed on the basis of a 360 day year and a 91 day
quarter) equal to the prime rate announced publicly by PNC Bank, N.A. at the
end of such calendar quarter.
5.6 Distribution of Deferral Account
Subject to Plan Section 5.8, distributions of a Participant's Account under
the Plan shall be made as follows:
(a) if a Participant has elected to defer his or her Fees to a specified date
in the future, payment shall be as of such date and shall be made or shall
commence, as the case may be, within thirty (30) days after the date
specified;
(b) if a Participant has elected to defer his or her Fees until cessation of
his or her service as a member of the Board of Directors, payment shall be as
of the date of such cessation of service and shall be made or shall commence,
as the case may be, within thirty (30) days after the cessation of the
Participant's service as a director; and
(c) if a Participant has elected to defer his or her Fees until the end of
the calendar year in which the cessation of his or her service as a member of
the Board of Directors occurs, payment shall be made or commence, as the case
may be, on or within thirty (30) days after December 31st of such year.
5.7 Payment Upon Death
Notwithstanding any elections pursuant to Plan Sections 5.2 and/or 5.9 hereof,
in the event of the death of the Participant prior to the distribution of his
or her Account hereunder, the balance credited to such Participant's Account
as of the date of his or her death shall be paid, as soon as reasonably
practicable thereafter, in a single distribution to the Participant's
beneficiary or beneficiaries designated on such Participant's deferral
election form. If no such election or designation has been made, such amounts
shall be payable to the Participant's estate.
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5.8 Timing of Distribution to Satisfy Section 16(b)
Notwithstanding Plan Sections 5.6 and 5.7, the Board of Directors may delay
any distribution of amounts deferred hereunder which are deemed invested in
Common Stock Units until six (6) months have elapsed from the date Common
Stock Units are credited to a Participant's account, or such earlier date that
such distribution can be made without violating the provisions of Section
16(b) of the Securities Exchange Act of 1934.
5.9 Form of Payment
A Participant may elect to have his or her Account under the Plan paid in a
single distribution or equal annual installments, not to exceed ten (10)
annual installments. To the extent a Participant's Account is deemed to be
invested in Common Stock Units, such Common Stock Units shall be converted to
Common Stock on the distribution date as provided in the next paragraph. To
the extent deemed invested in units of any other stock such units shall
similarly be converted and distributed in the form of stock. To the extent
invested in a medium other than Common Stock Units or other units, each such
distribution hereunder shall be in the medium credited to the Participant's
Account.
To the extent a Participant's Account is deemed invested in Common Stock
Units, a single distribution shall consist of the number of whole shares of
Common Stock equal to the number of Common Stock Units credited to the
Participant's Account on the date as of which the distribution occurs. Cash
shall be paid to a Participant in lieu of a fractional share, determined by
reference to the Stock Price on the date as of which the distribution occurs.
In the event a Participant has elected to receive annual installment payments,
each such payment shall be determined as follows:
(a) To the extent his or her Account is deemed to be invested in Common Stock
Units, each such payment shall consist of the number of whole shares of Common
Stock equal to the number of Common Stock Units (including fractional units)
credited to the Participant's Account on the date as of which the distribution
occurs, divided by the number of annual installments remaining as of such
distribution date. Cash shall be paid to Participants in lieu of fractional
shares, determined by reference to the Stock Price on the date as of which the
distribution occurs.
(b) To the extent his or her Account has been credited in cash, each such
payment shall be calculated by dividing the value on the date the distribution
occurs of that portion of the Participant's Account which is in cash by the
number of annual installments remaining as of such distribution date.
Each Participant or beneficiary agrees that prior to any distribution under
the Plan, he or she will make such representations and execute such documents
as are deemed by the Board of Directors to be necessary to comply with
applicable laws.
6. Administration of the Plan.
The Board of Directors shall administer the Plan. The Board of Directors
shall have plenary authority in its discretion to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to it; to
determine the terms of Fees deferral agreements executed and delivered under
the Plan, including such terms and provisions as shall be requisite in the
judgment of the Board of Directors to conform to any change in any law or
regulation applicable thereto; and to make all other determinations deemed
necessary or advisable for the administration of the Plan; provided, however,
that the Board shall have no discretion with respect to the eligibility or
selection of directors to receive shares of Common Stock under Section 4.1 of
the Plan, the number of shares of Common Stock to be granted or purchased
under the Plan or the timing of the grant or purchase of such shares, or the
purchase price for such shares. The Board of Directors' determination on the
foregoing matters shall be conclusive.
7. Termination and Amendment of the Plan.
The Board of Directors may at any time terminate the Plan or make such
modification or amendment of the Plan as it shall deem advisable; provided,
however, that no amendment may be made, without the approval of the
Corporation's shareholders, which would (i) materially increase the benefits
accruing to Participants under the Plan, (ii) materially increase the maximum
number of shares reserved for issuance under the Plan (except pursuant to the
last paragraph of "Stock Reserved for the Plan" below) or (iii) materially
amend the requirements as to the class of persons eligible to participate in
the Plan and, provided further, that no modification or amendment of the Plan
shall reduce any amount already credited to a Participant's Account as of the
effective date of such modification or amendment. This Plan may be amended
without shareholder approval in order to ensure that this Plan, in form and
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operation, complies with regulations issued under Section 16 of the Securities
Exchange Act of 1934. In no event may the Plan's Participation, Payment of
Fees or Deferral of Fees provisions be amended more than once every six (6)
months other than to comport with changes in the Internal Revenue Code of
1986, as amended (the "Code"), or the Employee Retirement Income Security Act
of 1974, as amended.
8. Stock Reserved for the Plan.
One hundred thousand (100,000) shares of authorized but unissued Common Stock
are reserved for issuance and may be issued pursuant to the terms of the Plan.
In lieu of such unissued shares, the Corporation may, in its discretion,
transfer to Participants under the terms of the Plan treasury shares,
reacquired shares or shares bought in the market for the purposes of the Plan,
provided that (subject to the provisions of the next paragraph), the total
number of shares which may be granted or sold pursuant to awards granted under
the Plan shall not exceed 100,000.
In the event of any changes in the outstanding Common Stock by reason of stock
dividends, split-ups, spin-offs, recapitalizations, mergers, consolidations,
combinations or exchanges of shares and the like, the aggregate number and
class of shares available under the Plan shall be appropriately adjusted.
9. No Interest in Assets.
No Participant or any other person shall have any interest in any specific
asset of the Corporation by reason of any amount credited to him or her
hereunder, nor any right to receive any distribution under the Plan except as
and to the extent expressly provided in the Plan. There shall be no funding
of any benefits which may become payable hereunder. No trust shall be created
by the execution or adoption of this Plan or be required to be created in
connection herewith. Any amounts which become payable hereunder shall be paid
from the general assets of the Corporation. Nothing in the Plan shall be
deemed to give any member of the Board of Directors any right to participate
in the Plan, except in accordance with the provisions of the Plan, or to
continue as a director of the Corporation. A Participant whose Account has
been credited with Common Stock Units hereunder shall not have any rights as a
holder of Common Stock until certificates for shares of such stock are issued
to such Participant.
10. Restriction Against Assignment.
No Common Stock Units credited to a Participant's Account or shares of Common
Stock subject to any Common Stock Unit shall be sold, assigned, transferred,
pledged or otherwise encumbered by a Participant otherwise than by will or by
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code prior to the date on which the
underlying Common Stock is issued, except that Participants may designate
beneficiaries to receive Common Stock underlying Common Stock Units as
provided in Plan Section 5.7 hereof.
The Corporation shall pay all amounts payable hereunder only to the person or
persons designated by the Plan as Participant or beneficiary, as appropriate,
and not to any other person or corporation. No part of a Participant's
Account shall be liable for the debts, contracts or engagements of any
Participant, his or her beneficiaries or successors in interest, nor shall it
be subject to execution by levy, attachment or garnishment or by any other
legal or equitable proceeding, nor shall any such person have any right to
alienate, anticipate, commute, pledge, encumber or assign any benefits or
payments hereunder in any manner whatsoever.
11. Government Regulations.
The Plan, and the deferral of Fees and purchase of Common Stock thereunder,
and the obligation of the Corporation to issue, sell and deliver shares, as
applicable, under the Plan, shall be subject to all applicable laws, rules and
regulations.
12. Governing Law.
This Plan shall be construed, regulated and administered under the internal
laws of the State of Ohio.
13. Shareholder Approval.
This Plan shall be without force and effect unless and until approved by the
Corporation's shareholders.
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